According to a report by Bloomberg, the CoinFLEX venture is backed by a consortium of investors including one of the main players in the recent Bitcoin Cash split, one of the major backers of Bitcoin ABC (which took over the BCH ticker) and early crypto evangelist, Roger Ver – Coinfloor, the first UK based cryptocurrency exchange, which was founded in 2013, will also keep a stake in the new concern with one of its co-founders, Mark Lamb, serving as CEO.

CoinFLEX will initially offer futures contracts for Bitcoin, Bitcoin Cash and Ethereum that – unlike the U.S.-regulated offering Bakkt is putting forward, it will be possibly to buy with up to 20x leverage. These contracts will be paired and priced with Tether, meaning those in short positions will deliver Bitcoin as promised and receive Tether, and visa versa for longs it will.

This could prove a somewhat controversial decision, given the problems faced by the somewhat controversial stablecoin traditionally twinned with Bitfinex, long the subject of chatter regarding whether it is backed by the funds required to keep its circulation paired 1:1 with US dollars.

Given that, unlike the New York-based, regulated and unleveraged offering by Bakkt, which seems to be pitching itself as a more reliable way to invest in Bitcoin – touting its links to existing futures markets, and its focus on reliable price discovery – CoinFLEX’s decision to leverage Tether-based trading, and base itself in the far less regulated environs of the Seychelles, seems to indicate – as Bloomberg posits – that it will be looking to take business from the Bahamas-based BitMEX, which offers highly leveraged futures and so-called perpetual swaps. However, its offering is ostensibly very different in that its contracts will end with physical delivery of the bitcoin to the trader rather than the cash-settled contracts.

Lamb told Bloomberg that “Crypto derivatives could become an order of magnitude larger than spot markets,” but that the “main thing that’s holding back that growth is the lack of physical delivery.”